Tim Schooley – Reporter- Pittsburgh Business Times
With more than $5 billion in development happening within a 225-acre wedge of mostly built-out land downtown, it will be necessary for Pittsburgh’s Golden Triangle to expand its borders to accommodate new growth.
Perhaps the most logical place for that to happen is in the Strip District.
There is a growing consensus Pittsburgh’s skyline will be altered by growth in the Strip, in particular the burgeoning development along Smallman Street, the Allegheny Riverfront and Penn Avenue adjacent to the triangle of the Central Business District.
“It’s going to be the Golden Ladle,” quipped Gregg Broujos, managing director of the Pittsburgh office of Colliers International, adding, “If that takes off, you better give me credit.”
In envisioning the future of the riverfront, stakeholders saw the potential to create a market-based model of sustainable development. They also became convinced of the need to widen the scope of their planning.
“One of the good things that came out of the Allegheny River Vision Plan was that we think of the Golden Triangle as being too small,” said Becky Rodgers, executive director of the community organization Neighbors in the Strip. “It should be from the Point out to Oakland, crossing over to Lawrenceville and a much larger Golden Triangle.”
Each direction the triangle can extend outward from the Point offers new opportunities, as evidenced by the growth on the North Shore and South Side.
Along the Monongahela River, the Pittsburgh Technology Center has been successful as a suburban-style riverfront office park. There’s also much potential in Hazelwood, where the Regional Industrial Development Corporation is preparing the 178-acre Almono site for development.
From the center of downtown, the 28 acres where the Civic Arena once sat offer a significant opportunity to extend the Central Business District into the Hill, while a proposed Bus Rapid Transit service through nearby Uptown brings hope of revitalizing a stretch between downtown and Oakland.
The Strip is it
A variety of factors have positioned the Strip District to become a natural extension of downtown.
Its basic advantages are largely the same as they’ve always been: It’s flat, close and offers more than 50 acres of largely open land owned by a well-capitalized developer in the Buncher Co.
Buncher’s expansive blueprint for a master-planned project called Riverfront Landing is currently on hold as the administration of Mayor Bill Peduto explores alternative options for redeveloping the 1,500-feet-long Pennsylvania Fruit Auction & Sales Building that neighbors the open land Buncher owns. While Buncher’s land is important to the Strip’s fortunes, there’s also a rush of private investment and development interest gestating in the city’s wholesale district other neighborhoods circling downtown can’t match.
Rita Caputo Formals, an agent for PRC Commercial Real Estate, said she expects the Strip District to emerge as an extension of downtown based on the interest and development activity she’s seeing in the neighborhood now. She’s been fielding inquiries, she said, from businesses such as banks, boutiques and light manufacturers that are eyeing the neighborhood. There’s also growing desire as well for residential development.
“I don’t think it’s going to look anything like it was because the skyline is going to change,” Formals said. “Because the Strip isn’t as congested on a daily basis as downtown, I think it’s going to be a little more desirable and affordable than downtown.”
Aside from Buncher’s larger plan, there are several development projects under way or approved and ready to go, such as a 150-room Homewood Suites being built next to Lidia’s Pittsburgh at Smallman and 14th Street. A block away, developer Brian Schreiber expects to start construction soon on a 59-unit apartment building. On the other side of Lidia’s, Sampson Morris has the green light to turn the massive New Federal Cold Storage building into a 144-unit apartment building, a project long in the works. The developer has yet to start construction.
Perhaps most intriguing for the Strip District is Oxford Development Co.’s planned $122 million mixed-use project called Three Crossings that will combine a 299-unit apartment community with 250,000 square feet of flex office space, complemented by a 700-space garage.
Oxford is pursuing the project on 11 acres between 25th and 27th streets along Smallman and Railroad streets, just past an apartment building and office property that already have succeeded side by side, the Cork Factory Lofts and Crane Building.
While the Cork Factory and its companion properties quickly reached full occupancy, the Crane Building has attracted high-visibility tenants such as Mullen Pittsburgh, Heartland Restaurant Group and 4moms. It’s an urban combination that appeals to a new generation that wants to live close to work.
Old potential, new promise
The potential of the Strip District as a growth corridor has been talked about for decades.
Aaron Stauber, president of New Rochelle, N.Y.-based Rugby Realty Co. Inc., owner of a variety of office buildings in and around downtown, remembers when there was ballyhoo about the Strip District as far back as the late 1980s.
“Back then, everybody was pretty much saying what they were saying seven years ago,” Stauber said. “Now the Strip is shortly going to really blossom.”
It was seven years ago that Rugby bought a centrally located warehouse property at Smallman and 23rd. With the upsurge of activity Stauber said he sees now in the Strip District, it appears to have been worth the wait.
“The good news is the pace of the economic turnaround in Pittsburgh has accelerated in the last six or seven years,” he said. “That’s being reflected now in the Strip District.”
Consider Rugby’s property on Smallman Street a barometer of the current interest in the Strip District; one of its lessees is one of the city’s hottest companies, baby-products manufacturer 4Moms.
Stauber remembers pitching the redeveloped property to drug store chains when Rugby first bought it, but interest was slight. Now, he said, it is getting unsolicited calls from those same retailers.
Rodgers sees a very different Strip District now than five or 10 years ago, a time when there was little new development and crime was, in her words, “outrageous.” After crime subsided, she said, the neighborhood began getting national attention for the unique character of its longtime food purveyors and other independent businesses.
Once a hulking riverfront structure that sat empty and decayed for decades, the Cork Factory Lofts now are among the city’s most desirable apartment properties. The 297-unit apartment project and its 96-unit companion have proven successful not only in attracting residents but also investors — they have poured more than $70 million into the project. In May, Newton Square, Pa.-based GMH Capital Partners, a large multifamily investment firm, bought the complex for an undisclosed price.
Collier’s Broujos said the sale of the Cork Factory and its related properties will be a catalyst for future investment in the neighborhood.
“The Cork Factory most likely sold for a Washington, D.C.-market type of a number, and it was bought by an outside investment company,” said Broujos, speculating the sale price could reach the nine-figure level. “That combination of factors just tells you can put a large scale development project in the Strip and the investment backing is going to be there.”
“In the Strip, if you put that money in you’re definitely going to get that money back,” he added.
The state of Pennsylvania hopes that proves to be the case. Even as much of the Buncher’s development plans are delayed, it is using $15 million in state grant funding to extend roads and plumbing and sewage through its Strip District property, setting the stage for a $450 million project that could include multiple office buildings and more than 700 apartments, along with possibilities for retail and a hotel or two.
Acknowledging the gradual pace of real estate development, Stauber expressed optimism Buncher’s plans and several others will come to fruition.
“I think these projects are going to happen, and the Strip is going to be a great place to be,” he said.
Tim Schooley covers retail, real estate, construction, hospitality, arts and entertainment, and government. Contact him at tschooley@bizjournals.com or 412-208-3826.
